Business

The new CRA: better, not easier

Article Abstract:

The Community Reinvestment Act of 1977 (CRA) has been revised to shift its focus on performance rather than paperwork. There was widespread agreement that the law's compliance procedures placed excessive emphasis on the requirement for banks to prove that they have taken appropriate measures to comply with CRA. The revised CRA, which took effect on July 1, 1997, simplifies the rules for assessing banking services. It also reduced the regulatory burden of community banks. However, these improvements do not necessary mean that compliance has become easier. In fact, for large banks with major home mortgage programs, the new CRA regulation has created new problems. These include meeting accuracy standards, dealing with data overload and maintaining loan quality.

Branching restrictions and banking offices

Article Abstract:

Archival data has been analyzed to study the implications of legislation that restricts bank branching on the number of bank branches, and to assess the relationship between banking restrictions and number of bank branches. Results are inconclusive, with no direct relationship between branching restriction and banking offices. The observation that no direct relationship exists between banking offices and branching restrictions is attributed to the inconsistency of regulation on the banking industry in terms of state legislature.